Canadian judge skeptical about hearing $19-billion Ecuador lawsuit case

Canadian judge skeptical about hearing $19-billion Ecuador lawsuit case by Colin Perkel, The Canadian Press, November 29, 2012, The tyee.ca
An Ontario court judge in Toronto is having a hard time understanding why he should be enforcing a $19-billion lawsuit award from Ecuador. The Ontario Superior Court is where Ecuadorian Amazon villagers are trying to collect on the award from Chevron Canada. The award to the villagers was made in Ecuador for contamination between 1972 and 1990 by Texaco, which Chevron Corp. bought in 2001. The villagers are in Canada because Chevron Canada has billions of dollars worth of assets here. Chevron Corp. is arguing Ontario has no jurisdiction because there is no connection between Chevron Canada and the villagers.

The judge says he’s not even sure there’s a final judgment in Ecuador, which would preclude his hearing the merits of the case. “Is there a final order from the Ecuadorian courts that this court needs to consider. This is basic stuff, folks,” Justice David Brown said. “We don’t look at stuff unless there’s a final order.” Alan Mark, the lawyer for Chevron, conceded there was a level of appeal pending and had difficulty getting his case going. Brown became increasingly frustrated that the basics weren’t being properly dealt with before hearing arguments. “You should all be down in New York. This is a New York fight, not an Ontario fight,” he said. “You seem to be putting the cart before the horse.”

After filing suit in Canada this past May, the Ecuadorians have launched similar legal actions in Argentina and Brazil. Earlier this month a judge in Argentina froze Chevron’s assets there until the $19 billion is collected.

Argentine Judge Freezes Chevron Assets To Pay $19 Billion Ecuador Fine by Pratap Chatterjee, November 12th, 2012, CorpWatch Blog
Adrian Elcuj Miranda, a judge in Buenos Aires, has ordered the seizure of Chevron’s assets in Argentina, to force the company to pay a $19 billion penalty for polluting the Amazon in Ecuador. The plaintiffs are seeking similar legal action in Brazil, Canada, Colombia and other countries. Chevron – a Northern California-based oil and gas company – merged with another company named Texaco in 2001 whose actions are the basis of the lawsuit. Between 1964 and 1992 Texaco admitted to dumping more than 16 billion gallons of toxic “water of formation” into the streams and rivers of the Ecuadorean Amazon that were used by local inhabitants for their drinking water sickening indigenous tribespeople and farmers. Some 900 open-air toxic waste pits still dot the area, where approximately 9,000 people are expected to contract cancer unless it is cleaned up, according to a study by Dr. Daniel Rourke, former of the Rand Corporation.

An initial lawsuit was filed by Ecuador’s indigenous communities in 1993. At the time the company asked for a trial in Ecuador to avoid a U.S. court battle. A second lawsuit was filed in 2003 by Fajardo and Luis Manza on behalf of 30,000 Ecuadoreans. In 2011 the Ecuadorean courts ruled against Chevron and ordered the company to pay $18.2 billion in damages, which was increased to $19 billion this past July. Chevron appealed the judgement but the Ecuadorean appellate court ruled against the company on January 3, 2012. Chevron is now trying a multitude of ways to defeat the ruling such as appealing the Ecuadorean fine in U.S. courts. “The Ecuador judgment is a product of bribery, fraud, and it is illegitimate … We do not believe that the Ecuador judgment is enforceable in any court that observes the rule of law,” the company said in a statement. Unfortunately for the company, U.S. courts have not been very sympathetic so far, presumably since the company argued that it wanted the case to be heard in Ecuador in the first place. Last month the Supreme Court refused to hear an appeal to block the Ecuadorean judgement.The company has also attempted to have the judgement thrown out by a secret arbitration panel under a provision in the U.S. Ecuador Bi-Lateral Trade. The Permanent Court of Arbitration under the United Nations Commission on International Trade Law in the Hague will begin hearings on the dispute later this month. Chevron has also filed a lawsuit in the U.S. against the plaintiffs for fraud, which will be heard in October 2013. The company has even created a special website, named “The Amazon Post” to documents its allegations. The Argentine ruling is a major setback for Chevron, say the plaintiffs. “We have fought now for almost two decades to correct the injustice created by Chevron in Ecuador,” commented Pablo Fajardo Mendoza, the lead lawyer in the lawsuit, who grew up in the oilfields polluted by Texaco. “While Chevron might think it can ignore court orders in Ecuador, it will be impossible for Chevron to ignore court orders in countries where it maintains substantial assets.” If Elcuj’s ruling is enforced, Chevron may forfeit as much as $2 billion in Argentine assets and also lose roughly $600 million a year in revenue from ongoing operations in that country, according to estimates by the plaintiffs. The company has appealed the ruling.

Chevron subsidiaries appeal Argentine asset freeze by Guido Nejamkis, Alejandro Lifschitz, Eduardo Garcia and Hilary Burke, November 09, 2012, Reuters
The subsidiaries, Chevron Argentina and Ing. Norberto Priu, argued that they are not directly owned by Chevron Corp , which was the target of the litigation in Ecuador.   “Chevron Corp, the sole judgment debtor, has no assets in Argentina. All operations in Argentina are conducted by subsidiaries that have nothing to do with the fraudulent judgment in Ecuador,” Chevron spokesman Kent Robertson said via email. … The claimants’ legal team estimates that Chevron’s assets in Argentina are worth around $2 billion and that they could obtain some $600 million a year if the embargo were enforced. Chevron is Argentina’s fourth-largest oil producer. The two Chevron subsidiaries filed a motion to revoke the court’s embargo order, arguing “it is improper on the basis of the plaintiffs’ documented fraud, jurisdiction, and misapplication of law,” Robertson said. Karen Hinton, U.S. spokeswoman for the Ecuadoreans, said the asset freeze must remain in place until the Argentine court decides whether it can enforce the Ecuadorean judgment. “We expect that Chevron’s attempt to undo the freeze order in Argentina will fail,” she said.

Hell Froze Over As Argentina Embargoes Chevron’s $2 Billion In Assets by The Chevron Pit, November 8, 2012
Yesterday, hell froze over when an Argentine court embargoed or, in effect, froze up to potentially $19 billion in Chevron assets in the South American country. Now it’s time to fight it out on the ice. Chevron, which now has about $2 billion in assets in Argentina, has sworn it will never pay a dime to cleanup the contamination it left behind in the Ecuadorian rainforest. Said former General Counsel Charles James: “Not till hell freezes over, and then we will fight it out on the ice.” Chevron has defied Ecuador’s courts, refusing to pay an enforceable $19 billion judgment and forcing the Ecuadorians to file lawsuits to seize assets in Ecuador, Brazil, Canada and Argentina to obtain the damage award for one of the world’s largest oil-related environmental disasters. The Ecuadorians and their lawyers — some of the top litigators in these four countries — have their skates on.

The order, signed by Civil Judge Adrian Elcuj Miranda of the Commercial Court of Justice in Buenos Aries, freezes almost all Chevron assets in Argentina pending enforcement of the Ecuador judgment. The embargo applies to 100% of Chevron’s capital in Argentina, 100% of dividends, all of Chevron’s stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron’s oil sales to Argentine refineries, and 40% of the money Chevron has deposited in Argentine banks, said Enrique Bruchou, the lawyer who represents the indigenous and farmer communities in Ecuador who brought the lawsuit. … Chevron has at least $2 billion worth of assets in Argentina, said Bruchou.  The freeze order applies to the entire $19 billion amount of the Ecuador judgment, meaning that Chevron will effectively be barred from investing further in Argentina unless it wants to risk seizure of those assets as well. “We are now on the fast track to collection in our two-decade struggle to force Chevron to clean up its awful environmental disaster,” said Luis Yanza, the Ecuadorian community organizer and driving force behind the lawsuit since it was filed in 1993. “We are committed to holding Chevron fully accountable for the crimes it has committed against our indigenous peoples,” he added.

Just recently, a court in Ecuador ordered the seizure of an estimated $200 million in Chevron’s assets in that country, which include bank accounts and a $96.3 million debt owed the oil giant by Ecuador’s government. … “We have fought now for almost two decades to correct the injustice created by Chevron in Ecuador,” said Fajardo, who grew up in Ecuador’s oil fields and is the recipient of a CNN Hero Award. “While Chevron might think it can ignore court orders in Ecuador, it will be impossible for Chevron to ignore court orders in countries where it maintains substantial assets,” he added.  “The decision of the Argentine judge proves that the sentence in Ecuador is legitimate and will be enforced in any country that observes the rule of law.”

The action in Argentina comes just weeks after the U.S. Supreme Court denied Chevron’s attempt to block enforcement of the judgment and the oil giant itself suffered a devastating series ofcourtroom setbacks. In May, Chevron CEO John Watson suffered a stunning reprimand when investors holding 38% of the company’s shares voted for a resolution that found he mishandled the Ecuador case. Watson’s former lawyer, Charles James, has said Chevron will fight the Ecuador judgment “until hell freezes over, and then skate it out on the ice.”  However, Chevron Comptroller Rex Mitchell recently testified in New York fedeal court that the seizure actions filed by the Ecuadorians would cause “irreparable harm” to company operations. [Emphasis added]

Supreme Court denies Chevron $19bn Ecuador appeal by BBC, October 9, 2012
The US Supreme Court has declined to block a judgement from an Ecuadorean court that a US oil firm pay billions in damages for pollution in the Amazon. Chevron was fighting a ruling that it must pay $18.2bn (£11.4bn) in damages, a sum increased to $19bn in July.The decision could affect other oil firms accused of pollution. The high court did not explain why it decided to reject the appeal from Chevron. … But Chevron has said it believes the judgement, handed down by a court in Ecuador in February 2011, is fraudulent and not enforceable under New York law. In March 2011 a court in New York issued an injunction that blocked the judgement. But it was overturned in January this year by an appeals court, which said Chevron had challenged the judgement prematurely. The appeals court also said the New York judge could not stop other, foreign courts from enforcing the judgement – something the Ecuadorean plaintiffs are working to do in Canada and Brazil. The judgement originally ordered $8.6bn in environmental damages, but that was more than doubled because the oil company did not apologise publicly. “While Chevron is disappointed that the court denied our petition, we will continue to defend against the plaintiffs’ lawyers’ attempts to enforce the fraudulent Ecuadorean judgment, and to further expose their misconduct,” Chevron said in an email statement. [Emphasis added]

Chevron says Ecuador arbitration to stretch into 2014 by Braden Reddall, August 2, 2012, Reuters
An international tribunal that will weigh in on Chevron Corp’s two-decade dispute over pollution in Ecuador has set a timeline that runs into 2014, according to a Chevron regulatory filing on Thursday. The panel, formed via The Hague’s Permanent Court of Arbitration under the United Nations Commission on International Trade Law, is hearing a dispute over whether Ecuador violated a treaty with the United States requiring it to guarantee Chevron a fair trial. … “On July 9, 2012, the Tribunal indicated that it wanted to hear the remaining issues in January 2014,” Chevron disclosed in its quarterly filing with the U.S. Securities and Exchange Commission on Thursday. Ecuador’s attorney general has argued the tribunal has no jurisdiction because the bilateral trade agreement between the United States and his country went into effect five years after Texaco ended operations in Ecuador in 1992. But earlier this year, the three-person panel reinforced its interim order that Ecuador suspend court-awarded payments of claims against Texaco, which was accused of polluting the rain forest and sickening people there. Some of those residents sued the company. Chevron says it uncovered through U.S. courts evidence of fraud by lawyers for the Ecuadorean plaintiffs, which the lawyers deny. The second-largest U.S. oil company is pursuing racketeering and fraud charges against the plaintiffs and their attorneys, and a New York judge ruled this week the fraud case could go ahead.

Ecuador court upholds $18bn penalty against Chevron by Associated Press, January 4, 2012, Guardian.co.uk
An appeals court in Ecuador has upheld an $18bn ruling against Chevron Corporation for oil pollution in the Amazon rainforest more than 20 years ago. The ruling confirmed a February judgment in the case. The Ecuadorean plaintiffs said in a statement that the decision was based on scientific evidence presented at trial proving that waste had poisoned the water supply. “The appellate court relied on a record that proved that Chevron has violated the rights of the communities where it operates,” the plaintiffs said in the emailed statement. [Emphasis added]

[Refer also to:  Criminal investigation at Chevron refinery, Pollutants allegedly routed around monitoring devices

Chevron Face Opposition Over Eastern Europe Fracking Plans

Water Disposal Most Severe Fracking Environmental Threat, Says Report

NY judge lets Chevron’s Ecuador claim move forward

Judge in Chevron Case Declines to Reject Award

Chevron Workers Plead To Be Evacuated Before Deadly Blast

Fracking Our Way to a Toxic Planet, When corporations roll back environmental protections to exploit our natural resources, they’re also exploiting us

Chevron’s Ecuador Cancer Problem: 10,000 People at Risk of Contracting Disease in Coming Decades, Says Expert, Oil Giant Faces Up to $69 Billion in Liability for Potential Cancer Deaths ]

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